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Hurricane mitigation reaps outsize ROI: FM Global

Hurricane mitigation reaps outsize ROI: FM Global

Every $1 a business spends on hurricane protection reduces loss exposure by an average of $105, according to a new analysis by FM Global.

The Johnston, Rhode Island-based insurer tallied an estimate for more than 10,000 wind- and flood-related investments and their associated reduction in property loss and business disruption exposure for 1,800 global clients from 2008 to 2017, according to a statement issued by the insurer on Wednesday. The estimates are calculated based on actual losses that have occurred at tens of thousands of properties insured by FM Global.

“Businesses often wonder if they are getting a good return when they invest in preventing hurricane-related wind and flood damage,” Brion Callori, FM Global’s senior vice president, engineering and research manager, said in the statement. “This analysis has yielded a pretty convincing answer. And the 1-to-105 ratio doesn’t even reflect the business repercussions of a major hurricane loss such as damage to reputation, market share and shareholder value.”

To help minimize the effects of wind damage, organizations should have backup power generators ready, rooftops inspected and secured, doors braced, windows covered and vulnerable objects put away or strapped down, including rooftop equipment and solar panels, according to the insurer.

Businesses can prevent flood damage by elevating or sealing off valuable equipment, fastening storage tanks, inspecting fire protection equipment and preparing to turn off utilities, the insurer said.

Any business exposed to flood risk should invest in developing and practicing a flood emergency response plan as facilities with well-organized plans have nearly 70% less damage and resume operations sooner than those with no plan or an inadequate one, according to FM Global’s loss history.



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